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EUR Higher Following Lagarde Comments

EURUSD continues to grind higher today with the pair now up around 2% off the year-to-date lows. Yesterday we heard from ECB president Lagarde who said that while she saw signs of disinflation in the eurozone, she still needed further proof that CPI is headed back to the bank’s 2% target sustainably. Speaking in Strasbourg, Lagarde told European lawmakers that stickiness in wage pressures remained a key issue and would likely take on greater importance in coming quarters.
 

ECB Meeting Due Soon

Looking ahead, the market awaits the next ECB rate decision in two weeks’ time. While no easing is expected, traders will be looking for a clearer signal on timing. At the start of the year, money markets had been pricing in an ECB rate cut by April, however, this pricing has since drifted out a little with June now the projected date for a cut. The key for EUR near-term will be whether the upcoming meeting sees pricing for a June cut building stronger or being pushed out further again.
 

Technical Views

EURUSD

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The correction lower in EURUSD has seen the market stalling for now into a test of the 1.0724 level and bull channel lows. With bullish momentum studies readings accompanying the bounce, focus now is on a fresh test of the 1.0937 level. 

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